Continuing Company Analysis-Amazon: Asset turnover ratio
Amazon.com, Inc. is one of the largest Internet retailers in the world. Netflix, Inc. provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services, however Amazon also sells many other products through the Internet. The sales and total assets (in millions) from recent financial statements were reported as follows for both companies:
Amazon | Netflix | |
Total revenues (sales) | $88,988 | $5,505 |
Total assets: | ||
Beginning of year | 40,159 | 5,413 |
End of year | 54,505 | 7,057 |
A. Based on your knowledge of each company, identify three major assets used by each company in generating revenue.
B. Compute the asset turnover ratio for each company. (Round to two decimal places).
C. Which company generates sales from total assets more efficiently?
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